DIFC Startup Licenses - 10 Leaves

1. DIFC Startup Licenses: Finance Since time immemorial, the Middle Eastern region has always been a bustling hub for travel and trade. The world’s most crucial trade routes, such as the Silk Road and the Spice Route, has threaded across the region to provide goods and services across cultures that otherwise would not have been able to interact in an era without the convenience of technology. Today, these trade routes are immortalised in the creation of financial hubs—except we are no longer content with being mere recipients of products. All these and more can be achieved only by setting up in exceptional locations that have a demonstrated history of fostering change, and one of those locations can be found in the United Arab Emirates (UAE). From the pearls to oil production and now to finance, the UAE is one of the world’s top locations for business—and with the wide variety of initiatives the government has planned, their position is only expected to get better. 1. The Fintech Leverage: Since its pivot towards finance in the 1990s, many foreign trading communities have made the decision to set up businesses in the country, particularly in Dubai. This has led to the emirate’s rapid expansion and establishment of several rules and regulations that allow foreign businesses to grow in a conducive business environment. There are more than thirty free zones in this emirate alone, one of which is the Dubai International Financial Centre (DIFC). This is where much of the emirate’s resources for fintech is centered, which allows for spillover effects to occur beyond the hub’s boundaries. It is in this small free zone along the national highway that innovative solutions from around the world are housed and developed—a blockchain platform that combines AI to automate KYC practices across multiple digital platforms, a micro-savings application that works on improving the spending habits of its users, a robo-advisor that combines wealth management advancements with the infrastructure needed to enable Islamic investments within the underserved GCC region, and many more.

2. 2. Accelerating Fintech Change: Some solutions lie in the hands of people who may not have the tools to actualize it by themselves. To remedy this, the DIFC empowers emerging startups with the FinTech Hive, a 12-week accelerator programme that gives startups the opportunity to test, develop, an adapt their solutions within the context of the regions financial services and insurance industries. Candidates that have their applications approved will be placed under the guidance and mentorship of the leading financial institutions and insurance companies from the Middle East and around the world. These successful applicants will have access to the DIFC’s Work Hub space, connections, and educational materials throughout the programme. By the end of the programme, the applicants conclude by presenting their products to an audience of investors and industry experts. This year the Fintech Hive has expanded its programme and is currently working with twenty-one partners, compared to the eleven finalists that were picked last 2017. It has also expanded its scope to included Insurtech, Regtech, and Islamic fintech. 3. Licensed for Innovation: Beyond the FinTech Hive, the DIFC launched the Innovation Testing License (ITL) last 2017 as part of the Dubai Financial Service Authority’s (DFSA) regulatory roadmap to help develop the spirit of innovation in the emirate. Fintech firms can safely develop and test their solutions within the DIFC without the regulatory requirements that usually apply to regulatory firms, provided that these firms have the qualifications for it. The DFSA works closely with these applicants to comprehend the business proposal and establish the controls necessary for the safety of any clients involved, all on a case-to-case basis. This DIFC start-up license runs for six to twelve months and in exceptional cases, the DFSA may consider extending this period. If a firm has fulfilled the outcomes detailed in the regulatory test plan and it can meet all of the DFSA’s Authorisation requirements, it will then migrate to full authorisation. However if it falls short, the company must cease conducting activities in the DIFC that need regulation. In addition, the DIFC also offers no regulated fintech start-up licenses. This enabling licensing scheme allows fintech firms to operate from the Centre and gain access to the DIFC Work Hub as well. While it is similar in some aspects to the DIFC’s start-up license, this one can be availed at a reduced cost for two years before upgrading to a full license. This effectively provides an opportunity for companies to concentrate their resources on strengthening their foundation before they become fully licensed in the DIFC. This license is open to Insurtech and Regtech firms as well.

3. The UAE has consistently worked to connect people and products from around the world, from the East to the West. It has consistently proved its mettle, from its transition from pearl diving to oil mining and now to financing. We are empowered to provide and develop more for ourselves and for others, and we are supported by several business options for this endeavour. We can mobilise people and resources to start businesses, or leverage a community of investors to develop innovative solutions for the disenfranchised. And as far as setting up businesses go, there’s no better place in the area that can help you grow than here in the UAE.